• PAGE ONE
• INDEX
• HOME

Russian steel major eyes equity in IISCO

Abhrajit Gangopadhyay

BANGALORE, Nov. 3

RUSSIA's State-controlled iron and steel major, TPE, has evinced interest to pick up equity in the ailing Indian Iron and Steel Company (IISCO), Mr Shoeb Ahmed, official spokesman of Steel Authority of India Ltd (SAIL), said. A joint statement to this re gard is expected from Prime Minister, Mr Atal Behari Vajpayee, and Russian Premier, Mr Vladimir Putin, early next week.

According to industry sources, TPE is likely to route its investment of close to Rs 800 crore through rupee-ruble fund following Government clearances.

Meanwhile, ISMT and Sunflag of Maharashtra have evinced interest to pick up an equity stake in Viswesharaiya Iron and Steel Company in Vadravati, the SAIL spokesman said. Both the firms have expressed interest and due diligence is underway, he added.

Another SAIL plant, Salem Steels Ltd, has drawn attention of the Tatas and Jindal Steel for investment. However, none of the prospective investors could assess Salem plant as agitating workers blocked their entry voicing concerns over their job security post-stake sale. Private investments could buy out as much as 74 per cent equity in the Salem Steel.

Steel industry sources pointed out that the Salem deal could fetch SAIL close to Rs 800 crore. The plant with an employee strength of 1,200 has an annual capacity of 200,000 tonnes and reported a loss of Rs 120 crore in the April-September period.

SAIL which reported a net loss of Rs 704 crore in the first half of the current fiscal, expects to offset a part of its projected loss for the year through sale of some of its non-core assets. The company expects to receive Rs 750 crore through part-sale of its power plants in Bhilai and Bokaro steel plants.

The stake-sale to Damodar Valley Corp for the 302 mega watt power plant in Bokaro is pending clearance from the Ministry of Power, the spokesman said. Another deal with National Thermal Power Corp for the 75 mega watt power plant in Bhilai is almost on t he verge of closure.

A further Rs 300 crore estimated through sales of residential property to be accrued in the current fiscal would help the firm offset ``sizeable'' losses in the financial year 2001-02. Admitting a severe downturn in the economy cramping down exports, Mr Ahmed said that even though sales had increased by 1.4 per cent in the second quarter of the current fiscal, realisations had failed to keep pace with it. However, the second half of the year looks better, going by the historical experience, he added.

SAIL also plans to issue a second round of voluntary retirement scheme in the second half of this fiscal and expects close to 300 employees would opt for it. Earlier this year, the company received applications from 7,700 personnel for voluntary retireme nt and the company agreed to offer early retirement to 6,000 of them. According to Mr Ahmed, SAIL expects its workforce to shrink to 90,000 in three years from the current level of 145,000.